Tuesday 3 July 2012

MoBIE: Socialist Instrument Or Steven Joyce's Great White Whale?

Nemesis: Steven Joyce will be hoping that his "super-ministry" - MoBIE - does not prove to be his undoing, as the Great White Whale, Moby Dick, did for the obsessional Captain Ahab in Melville's famous novel.

IT’S HUGE, it’s “business facing” and, in the right hands, it could give Treasury a run for its money. What is it? The official designation is the Ministry of Business, Innovation and Employment, but it’s called MoBIE (as in “Moby Dick”) for short. Will this new “super-ministry” become the critical driver of John Key’s Government’s economic plans; or will it turn out to be the Great White Whale that drags its creator, Steven Joyce, to the bottom? Interestingly, not everyone hoping for the latter is located on the Opposition side of the aisle.

There’s no doubt that the amalgamation of the Ministry of Economic Development, the Department of Labour, the Ministry of Science and Innovation, and the Department of Building and Housing is a high-risk gambit. Not only because the critical responsibilities of the former stand-alone ministries and departments are at real risk of being blurred, downgraded or even elided in the new structure, but also because Mr Joyce’s bureaucratic behemoth may simply prove to be too large, too complicated and too cumbersome to achieve its minister’s ambitious goals.

Officially, MoBIE’s purpose is to create a more efficient and effective Ministry focused on lifting overall productivity and supporting the growth of competitive businesses in order to create more jobs, paying higher wages, and boosting our standard of living. It is hoped that by grouping formerly discrete bureaucratic functions into a single structure businesses and companies will find it easier to access innovative ideas, markets, capital, skilled workers, resources, and the supporting public infrastructure.

“The Government has a comprehensive business growth agenda to assist business, and a single focused business-facing government ministry will further boost our momentum”, said Mr Joyce, in a statement announcing the creation of the new super-ministry on 15 March 2012.

The crucial question posed by MoBIE’s creation is: “What will fuel this new bureaucratic machine?” If the present government’s past behaviour is any guide, it will be fuelled by foreign capital.

What Mr Joyce appears to be offering overseas investors is a ministry to normalise and co-ordinate the sort of ad-hoc deal we saw struck between Mr Key’s Government and Warner Bros. over The Hobbit. In that deal New Zealand’s labour law was made fit for Warner Bros.’ purpose; the innovative prowess of Sir Peter Jackson and Weta Workshops buttressed, and New Zealand’s film industry jobs protected. MoBIE’s mission would appear to be to make that sort of one-off accommodation to the needs of both domestic and foreign capital routine.

If that is correct, then it’s easy to see why the NZ Council of Trade Unions has expressed its profound unease about MoBIE. CTU Secretary, Peter Conway, is concerned that: “plans to have a sole ‘business facing’ purpose for the Department responsible for safety at work, holidays, parental leave, minimum wages, and for wider workers’ employment conditions and rights poses great risks for the interests of the over two million New Zealanders who are in the workforce.” Unsurprisingly he drew the Government’s attention to the serious shortcomings exposed within the stand-alone Labour Department by the Pike River Disaster inquiry:

“Tragedies such as Pike River have shown that the Government is already struggling to provide adequate resourcing to the health and safety inspectorate, and to adequately carry out their health and safety functions.” How likely is it that the new “business-facing” MoBIE will turn around and become a “worker-facing” organisation?

The Labour Party’s opposition to MoBIE’s establishment is somewhat harder to fathom. In the hands of an unashamedly interventionist social-democrat (David Cunliffe take note!) MoBIE could become the dominant instrument of government policy, consigning Treasury to a distant second place. Fuelled by the capital reserves of the Cullen Fund and a state-run Kiwisaver, with powers to determine minimum wages and conditions, union rights, research funding, regional development and housing construction, MoBIE could swiftly take on the nation-building role of the 1930s Ministry of Works. Its capacity to create tens of thousands of jobs – principally by building new homes and upgrading New Zealand’s decaying infrastructure, would make MoBIE the most valuable tool in Labour’s workshop.

The precedent is there not only in our own Ministry of Works, but in the United States Department of Health, Education and Welfare (HEW). Brought into existence by Presidential decree in 1953, HEW became the principal architect and builder of America’s post-war welfare state, especially President Johnson’s “Great Society”. What made it work was the powerful common objectives of its component divisions. Until its demise in 1979 (when Education was calved-off to form a separate department) HEW oversaw the continuation and elaboration of President Roosevelt’s “New Deal”.

Infused with HEW’s sense of historic mission and reformist zeal, MoBIE could become the driver of twenty-first century social-democracy in New Zealand. The reason, perhaps, why not all of Mr Joyce’s cabinet colleagues are celebrating its birth.

This essay was originally published in The Press of Tuesday, 3 July 2012.

1 comment:

Victor said...

This is an interesting idea, Chris.

Let me state the obvious case against it, in the hope that you or other posters can convince me otherwise.

Whether we're talking unrestrained capitalism, socialism or social democracy, big tends NOT to be beautiful.

Big institutions, be they designed for profit-making or the public good, either tend towards atrophy, institutionalisation and loss of focus or, alternatively, depend for their continued focus on doctrinaire rigour. Either way, the exercise tends massively towards the self-referential and to lose touch with external realities.

Another problem with size is that mistakes (and crimes) take place on a bigger scale. The Soviet Union under Stalin and his heirs was one obvious example of this tendency. The current wave of corporate fiascos from Enron to Barclays is another.

A further issue is the destruction of useful practical, administrative and/or business cultures in the units amalgamated. Examine any organisation that has lasted any length of time and there will be valuable aspects to its culture that can't be lifted holus bolus and placed down in a new institutional environment.

And another consideration is that pluralism and the distribution of power are good things in themselves; good not just for the purposes for which specific institutions are set up but for the ongoing life of a nation.

And, finally, to prolong the literary analogy, every Moby Dick has a Captain Ahab on his tail!